Bangladesh, India sign $4.5b LoC

Bangladesh on Wednesday signed a US$4.5 billion line of credit (LoC) agreement with India.

This is the third LoC between the two countries that is also the second largest loan agreement in Bangladesh history.

India's visiting finance and corporate affairs minister Arun Jaitley and his local counterpart AMA Muhith witnessed signing of the agreement.

It was signed between Bangladesh’s Economic Relations Division (ERD) and India’s Export-Import Bank of India (Exim Bank) at the finance ministry office in Dhaka around 11:00am.

According to the ERD, the government has prepared a list of 17 key infrastructure projects that will be financed from the latest Indian loan.

The projects include developing infrastructure for power supply from Rooppur nuclear power plant, setting up multi-purpose terminal at proposed Payra deep-sea port, Buriganga river and its banks restoration, constructing dual gauge railway line from Bogra to Sirajganj, modernising Saidpur Airport, converting Benapole-Jessore-Bhatiapara-Bhanga roads to four lanes, building a container terminal in Chittagong, constructing a container depot in Ishwardi, setting up a line to supply power Katihar-Parbatipur-Barnagar, upgrading Mongla port, building a dry dock in Chittagong, setting up a 100-MW solar power project unit in Mollarhat, converting Mirsarai's Baroirhat-Ramgar road to four lanes, laying a special economic zone in Mirsarai, converting Comilla-Brahmanbaria-Sarail road to four lanes, supplying waste disposal equipment to Dhaka South City Corporation, and supplying 1,00,00 LED bulbs to Dhaka, Chittagong, and Rajshahi.

The ERD officials said as per terms and conditions of the third LoC, only Indian contractors will get the right to carry out project works.

If any of public works is taken under the LoC, the government should procure 65 per cent materials and services from India, suggests the agreement. For other projects, Bangladesh has to buy 75 per cent of materials and services from the credit supplier, the officials added.